Like other states, California gives contractors, which includes a range of professionals who perform work on homes and buildings, the option to file what is called a mechanics lien.
Mechanics liens are important legal tools that honest contractors can use to make sure that they get paid for the work that they did.
However, a mechanics lien can also cause a headache for a Los Angeles property owner.
As is the case with other lienholders, the contractor can always try to foreclose the lien, meaning that the property will be sold out from under the owner.
Foreclosure is possible even if the owner had nothing to do with not paying the contractor. Ultimately, the owner may have no choice but to pay off the lien. In some cases, the owner may even be stuck paying for a construction project twice.
Even if there is no foreclosure, the owner still has to deal with a recorded lien against the property, which can reduce the property’s value.
Mechanics lien laws are complicated, and contractors must follow them
A property owner who discovers that a mechanics lien has been recorded against the property may have some legal options for avoiding or releasing the lien. The real estate laws governing mechanics liens are both complicated and strict.
If a contractor attempting to enforce a lien misses a deadline or an important step, it can mean that the lien is not enforceable, especially against an innocent property owner who had no role in failing to pay a contractor.
There are other options for dealing with surprise mechanics liens
There also other options for dealing with surprise mechanics liens.
For example, attention to detail in a real estate negotiation can go a long way in making sure that a buyer does not unwittingly purchase a property with mechanics liens recorded against it.
An effective negotiation can also ensure that, for those corner cases in which a mechanics lien is recorded despite an investor’s best efforts, those truly responsible for the lien will be the ones to pay it off.